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Applying for small business income tax concessions

Posted on August 7, 2020 by admin

Businesses looking to save on tax for the financial year may consider applying for income tax concessions.

Businesses classified as a small business entity are eligible for income tax concessions. Since 1 July 2016, businesses are considered small business entities in the case that they:

In the event that you meet the above requirements as a small business entity, here are the income tax concessions available to you.

Small business structure rollover
Small business entities can change the legal structure of their business and transfer active assets from one entity to another without incurring any income tax liability. Assets such as capital gains tax assets, trading stock, revenue assets and depreciating assets are eligible in this rollover. The rollover is also only available in the case that it is part of a genuine restructure and there is no change to ultimate economic ownership.

Simplified trading stock rules
Under the simplified trading stock rules concession, you can estimate the value of your trading stock at the end of the financial year when reporting in your tax return. However, small businesses will also need to show how they calculated their estimated trading stock value. Businesses which choose not to use an estimate will need to account for value changes in their stock and conduct a stocktake. Stocktakes do not need to be conducted if there is a difference of $5,000 or less between the value of your stock at the start of the income year.

Immediate deductions for prepaid expenses
Payments which cover a period of 12 months or less that are ending in the next income year are eligible for immediate deductions. Prepaid expenditure is also immediately deductible when the period ends no later than the last day of the income year following the year in which the expenditure was incurred.

Two-year amendment period
Small businesses receiving a notice of assessment from the ATO have a two-year time limit for reviewing an assessment.

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Small businesses and mental health

Posted on October 21, 2020 by admin

Owning and running a small business often means that you are responsible for most or all of the tasks that need to be completed. Often, owners will find their time being entirely occupied with their business. This can take a toll on their mental health and cause work related stress. Which not only inhibits one’s ability to complete the duties of their role, but also puts them at greater risk of developing mental health conditions.

Keeping work hours in check

Although it is tempting to focus on your business at all times, this can prevent individuals from participating in other activities which are important for physical and mental health. Business owners may feel motivated and enthusiastic to put extra time into their work, however, long work hours have been associated with poorer mental health, fatigue, burnout, worry, and irritability.

Creating a work life balance by setting time limits on work hours might be a necessary precaution at the start. Taking breaks during the work day and setting time aside during the week will be extremely beneficial.

Accessing support

Running a small business can often be isolating as there is rarely someone to share concerns of the business with. This will mean that owners are dealing with all of the issues on their own.

Discussing issues that arise with family or close friends can help reduce the feeling of being isolated. Alternatively, there are groups of small business owners who, and business mentors who may be able to understand and relate to what owners are experiencing, and potentially provide relevant advice.

Maintaining a healthy lifestyle

A healthy lifestyle can help individuals manage stress and work towards improved mental health. This will also improve the ability to focus and concentrate when working.

Developing good sleeping habits is a great way to kickstart this process. It can also be helpful to try different relaxation techniques such as meditation and exercise is an important start. Remember that this is a trial process, so trying different techniques to find the most effective one is essential.

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